E-Weekly
Aug 27th, 2008                                Print this article

TPE resin pricing: PE up, PP down, PS steady

By Modern Plastics Editorial Staff

The spot polyethylene (PE) market rose last week as offers increased while prices eased, according to spot-trading platform, The Plastics Exchange (TPE; www.theplasticsexchange.com) and partner, The PetroChem Wire (www.petrochemwire.com) said some uncertainty remains in the market since ethylene contracts have yet to settle, although monomer prices and upstream cracker feedstock prices were lower in August than in July. Producers are seeking an $0.08/lb increase for August, maintaining that they need to recover margin lost earlier this year. TPE reports that this increase has already been delayed due to substantially lower monomer costs and weak demand throughout the chain. Producers issued, and were mostly able to push through, a $0.07/lb increase in July. Spot offers had reflected August price levels factoring in the proposed $0.08/lb contract increase, but processors and traders were unwilling to pay those levels, with bids far below August and sometimes July price levels. Domestic high-density blowmolding cars were offered at around $0.80/lb, with fresh railcars of low-density and linear low-density film grades hard to find. LDPE film was priced in the high $0.80’s/lb to low $0.90’s/lb. LLDPE film grades were all around the $0.80’s/lb depending on the co-monomer. TPE says that through the first half of 2008, export sales absorbed more than 20% of total sales from North American producers, propping up a sagging domestic market, but a lack of new export business has intensified the bearish sentiment surrounding the PE market in August.

The spot polypropylene (PP) market was active, with ample offers and falling prices. TPE says the bulk of buying interest was from processors seeking prompt material, since they had kept lean inventories in recent weeks due to record-high prices and the expectation of a price drop. Producers initially sought a $0.06/lb increase for August contracts, which haven’t yet settled, based on the potential for increased monomer costs. In the face of falling propylene monomer costs, producers now say they need to recover margin lost in previous months. In spite of this, a number of PP traders and processors told TPE the increase is off, especially with the rollover of August propylene monomer contract pricing. Generic prime homopolymer ended the week in the mid $0.80’s/lb range, down from the high $0.80’s to low $0.90’s/lb. Copolymer closed in the high $0.80’s to low $0.90’s/lb, with a substantial amount of wide-spec offers and many transactions closed there in the lower $0.80’s/lb.

TPE says spot polystyrene (PS) offers were again limited, with offers that have been shown to the market priced above July levels. High-impact has maintained an expanded premium to general-purpose due to tight and expensive butadiene supplies. Producers, looking to keep reactors running well, have produced more general-purpose, so availability there is somewhat better. Offers for good offgrade high-impact railcars have are around the $1.00/lb level and sell quickly, according to TPE.

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